- Physical Machines ("Bare Metal") which are essentially dedicated servers provisioned on a utility basis (e.g. hourly), whether physically independent or just physically isolated (e.g. blades)
- Virtual Machines which nowadays uses hypervisors to split the resources of a physical host amongst various guests, where both the host and each of the guests run a separate operating system instance. For more details on emulation vs virtualisation vs paravirtualisation see a KB article I wrote for Citrix a while back: CTX107587 Virtual Machine Technology Overview
- OS Virtualisation (e.g. containers, zones, chroots) which is where a single instance of an operating system provides multiple isolated user-space instances.
Anyway such cloud services didn't exist at the time but in France at least we did have providers like Dedibox and Kimsufi who would provision a fixed configuration dedicated server for you pretty much on the spot starting at €20/month (<€0.03/hr or ~$0.04/hr). I figured there was nothing theoretically stopping this being fully automated and exposed via a user (web) or machine (API) interface, in which case it would be indistinguishable from a service delivered via VM (except for a higher level of isolation and performance). Provided you're billing as a utility (that is, users can consume resources as they need them and are billed only for what they use) rather than monthly or annually and taking care of all the details "within" the cloud there's no reason this isn't cloud computing. After all, as an end user I needn't care if you're providing your service using an army of monkeys, so long as you are. PCI compliance anyone?
Virtually all of the cloud infrastructure services people talk about today are based on virtual machines and the market price for a reasonably capable one is $0.10/hr or around $72.00 per month. That's said to be 3-5x more than cost at "cloud scale" (think Amazon) so expect that price to drop as the market matures. Rackspace Cloud are already offering small Xen VMs for 1.5c/hr or ~$10/month. I won't waste any more time talking about these offerings as everyone else already is. This will be a very crowded space thanks in no small part to VMware's introduction of vCloud (which they claim turns any web hoster into a cloud provider) but with the hypervisor well and truly commoditised I assure you there's nothing to see here.
On the lightweight side of the spectrum, VPS providers are a dime a dozen. These guys generally slice Linux servers up into tens if not hundreds of accounts for only a few dollars a month and take care of little more than the (shared) kernel, leaving end users to install the distribution of their choice as root. Solaris has zones and even Windows has MultiWin built in now days (that's the technology, courtesy Citrix, that allows multiple users each having their own GUI session to coexist on the same machine - it's primarily used for Terminal Services & Fast User Switching but applications and services can also run in their own context). This delivers most of the benefits of a virtual machine, only without the overhead and cost of running and managing multiple operating systems side by side. Unfortunately nobody's really doing this yet in cloud but if they were you'd be able to get machines for tasks like mail relaying, spam filtering, DNS, etc. for literally a fraction of a penny per hour (VPSs start at <$5/m or around 0.7c/hr).
So the reason for my writing this post today is that SoftLayer this week announced the availability of "Bare Metal Cloud" starting at $0.15 per hour. I'm not going to give them any props for having done so thanks for their disappointing attempt to trademark the obvious and generic term "bare metal cloud" and due to unattractive hourly rates that are almost four times the price of the monthly packages by the time you take into account data allowances. I will however say that it's good to see this prophecy (however predictable) fulfilled.
I sincerely hope that the attention will continue to move further away from overpriced and inefficient virtual machines and towards more innovative approaches to virtualisation.